The spread of the coronavirus disease (COVID-19) may not be the only thing that continues to see an increase in cases this summer. According to the Federal Bureau of Investigation (FBI), there are a variety of fraudulent schemes actively occurring as people try to exploit the pandemic to their benefit. In this article, we will discuss several of these COVID-19-related fraud schemes. If you have been accused of a fraud-related crime, consult a fraud defense attorney in Tampa at The Rickman Law Firm.
According to a March memorandum issued by U.S. attorney general William Barr, the spread of COVID-19 has “only served to increase the number of stimulus, healthcare, bank, elder, and government fraud schemes.” As of May 28, 2020, the Internet Crime Complaint Center (IC3) reported that they had received nearly the same amount of complaints in 2020 (about 320,000) as they had for the entirety of 2019 (about 400,000). IC3 announced that approximately
“75 percent of these complaints are frauds and swindles.” Let’s review some of the most common complaints IC3 has received in 2020.
Many small businesses raced to file their application for a PPP loan when it was announced in March 2020. The relief program under the CARES Act has led to many individuals fraudulently applying for a loan or targeting small businesses or the banks that allocate the funding from the federal program. In some cases, credible businesses have reported that they cannot apply for a loan because their Employer Identification Numbers were used in a fraudulent application. In other cases, individuals set up fake websites claiming to be a facilitator of the federal program. These websites then steal the information of any employer that unknowingly applies for a loan through the website. There have also been cases in which a fraudulent party made up a nearly identical email address to that of the CEO of a company that received funding and then requested a bank to deposit the PPP funds directly into a separate account listed in the email.
The FBI recently formed a PPP Fraud Working Group to address any schemes being deployed for PPP-related crimes. As of the time of this article, the FBI announced that they had initiated nearly 100 PPP-related investigations, with over $42 million in potential fraud crimes identified. These investigations have identified a wide net of potential perpetrators, including bank insiders, felons, identity thieves, and dormant or shell companies trying to obtain payroll funding despite not having a workforce.
The current demand for PPE and other supplies has created supply chain issues as the businesses that produce these resources try to meet consumer demand. Unfortunately, with a gap in the supply chain, many individuals will look to exploit consumers’ demand through a variety of email compromise schemes that essentially steal personal information from the victim. For example, the victim may receive an email offering masks, hand sanitizer, ventilators, and other in-demand products at an affordable price. The victim then prepays for these goods to be delivered to their home, and they either receive counterfeit supplies or nothing at all. Even worse, they now have sent personal information to the individual to use for their own criminal purposes.
With millions of Americans out of work, there has been a spike in schemes related to unemployment claims, “work from home” opportunities, and other scams that target individuals in money mule schemes. Credit unions nationwide have reported seeing an increase in unemployment insurance fraud cases as individuals are stealing the victim’s identity to use the information to file a false unemployment claim. There have also been a variety of money mule schemes that occur when a criminal, who obtained money through illegal activity, launders the money by moving it through other people’s (mules) personal bank accounts. The money is then processed or transferred back to the criminal by being deposited into a third-party bank account. This is often done through cashier checks, virtual currently, or a prepaid debit card. It’s illegal for both the person orchestrating these transactions and the mule that is complicit with the scheme. Money mule schemes can also open the mule up to jeopardizing their own financial security.
Due to challenges with finding effective treatment and a cure for COVID-19, the healthcare industry has seen its share of fraudulent schemes involving individuals selling unapproved treatment options through a variety of platforms, including websites, social media pages, telemarketing calls, and door-to-door sales. The most common example is individuals selling an unapproved COVID-19 testing kit. For many of these schemes, these individuals are attempting to obtain access to personal and health insurance information from victims. Although these types of schemes aren’t new to the criminal world, they are focused on taking advantage of older, at-risk populations that are interested in additional medical supplies to combat the spread of COVID-19.
Whether it’s attempting to sell counterfeit PPE items online, filing fraudulent unemployment insurance claims, hacking into a company database, or engaging in inappropriate messaging online with a minor, fraud crimes and all internet-based crimes are expected to continue to increase as more individuals remain at home and communicate through online platforms. If you have been accused of fraud or an internet-related crime, consult a fraud defense lawyer in Tampa. At the Rickman Law Firm, our knowledgeable and experienced attorneys will review the details of your case and provide you with the accurate legal counsel you require. To learn more about our services, pick up the phone and call the best federal criminal defense lawyer in St. Petersburg at the Rickman Law Firm.
For a free consultation with the best federal criminal defense attorney in St. Petersburg, please contact The Rickman Law Firm today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.